Guest Post — The Quantum Cold War is Here

How encryption, sanctions, and diplomacy will shape the next technological arms race

By Nema Milaninia and Michael Galdo

I. The Stakes Are High

We are entering a new era of strategic competition—one not defined by missiles or tanks, but by qubits. Quantum computing, though still in its early stages, is already viewed as a national security concern, an economic asset, and a geopolitical lever. The reason is clear: if quantum computers achieve their expected capabilities, they could break modern encryption standards, accelerate molecular discoveries with profound implications for medicine and materials science, and reshape financial systems through advanced algorithmic optimization.

Traditional computers process information using 1s and 0s. Quantum computers, however, use qubits, which can exist in multiple states at once, thanks to the principles of quantum physics. These qubits are created by manipulating quantum particles like photons or electrons. Because of their unique properties, quantum computers can perform certain calculations exponentially faster than today’s most powerful supercomputers. This could revolutionize fields like encryption, financial modeling, logistics, and drug discovery—solving problems that are currently too complex or time-consuming for traditional computers.

While most of the attention has been on the latest developments in the AI-arms race, governments understand the potential disruption posed by quantum. The U.S. is scrambling to roll out quantum-resistant cryptography before adversaries get there first. China is investing billions in quantum networks that could render electronic surveillance obsolete. And in the meantime, we’re watching the emergence of a new class of tech sanctions, with the U.S. restricting China’s access to quantum technology the same way it cracked down on advanced semiconductors. The rules of global power are being rewritten—by algorithms and export controls.  As noted by Mike Pezzullo, the former secretary of the Home Affairs Department, “Quantum computing combined with advanced AI will rule the world.”

Unlike nuclear weapons, quantum technology isn’t easy to track. There’s no satellite image that can reveal how close a country is to cracking encryption and no radiological signature to stop its proliferation. Most of this research is happening inside corporate R&D labs and university physics departments. There are also multiple forms of qubits, all using different technologies, with no agreed technical standards. That makes quantum technology fundamentally harder to regulate, easier to proliferate, and, in some ways, more destabilizing than anything that’s come before it.

II. The Rise of Quantum Technology Controls

Because quantum supremacy could shift geopolitical power so dramatically, governments are already treating it like a strategic asset. The Biden administration quietly used export controls—similar to the ones designed to cut China off from the most advanced chips needed for cutting-edge AI development—to restrict quantum technology. In 2022, then President Biden also issued National Security Memorandum 10, warning that quantum computing “poses significant risks to the economic and national security of the United States.” The memorandum directed federal agencies to engage with critical infrastructure sectors, as well as state, local, tribal, and territorial partners, to address the threats posed by quantum advancements.

The logic is straightforward: just as the U.S. doesn’t want China building next-generation fighter jets with American-made semiconductors, it doesn’t want China developing quantum computers with American-made superconducting circuits. But this approach comes with risks. Restricting AI chips was relatively straightforward—the most advanced chip manufacturers are based in the U.S. or in U.S.-allies and only three foundries can manufacture the most advanced chips.

Quantum research, on the other hand, is deeply collaborative with diffuse expertise.

When the U.S. tightened quantum export controls in 2024, it created licensing exceptions for like-minded countries that similarly restricted the export of quantum technology. Nations like the United Kingdom, Germany, Australia, and Canada, to name a few, have been granted this exception.  South Korea, another leader in quantum technology, is not included in the exception, but licensing applications are treated with a presumption of approval by the U.S. The goal, according to U.S. officials, is to make it more difficult for adversaries like China to develop and deploy quantum technology.

Meanwhile, China is moving aggressively to build its own quantum ecosystem. It has poured over $15 billion into quantum R&D—far more than the U.S. government’s publicly disclosed investments.  China also already operates the world’s most advanced quantum-encrypted communication system, with satellite-based quantum key distribution (QKD) enabling theoretically unhackable transmissions. If China succeeds in scaling this technology, it could create an alternate internet where U.S. intelligence agencies are effectively blind.

III. The International Law Vacuum

All of this raises a critical question: should quantum technology be governed by international treaties? Or will it become another domain of economic and cyber warfare?

There is some precedent for international regulation. The Treaty on the Non-Proliferation of Nuclear Weapons (NPT) has kept the number of nuclear-armed states relatively low for decades, while also allowing for the development of peaceful nuclear energy technology. But quantum computing doesn’t fit neatly into existing arms control frameworks.

Take quantum decryption. If a country develops a working quantum computer capable of breaking encryption, should it be legally required to disclose that capability to the international community? If so, who enforces that? The United Nations? The U.S.? There is no Geneva Convention for algorithms and policy makers may need to start building international norms before quantum cyberattacks start happening in the wild.

The likeliest outcome? A fragmented quantum world. Just as we have separate internet ecosystems for China and the West—one controlled by Beijing, the other dominated by Silicon Valley—we may soon have parallel quantum infrastructures.

IV. The Future of the Quantum Cold War

If history is any guide, we should expect quantum technology to follow the same trajectory as AI, semiconductors, and nuclear weapons: rapid innovation, rising geopolitical tension, and eventually, an uneasy détente.

But there’s a key difference. Unlike nuclear weapons, which states were incentivized to control, quantum technology has immense civilian applications.  Additionally, quantum computing is being designed to work hand-in-glove with high-performance computers, while at the same time AI development is rapidly advancing.  Advanced AI capabilities supercharged with quantum computing to tackle the most complex algorithms, is a likely future, not the stuff of science fiction.

So where does that leave us?

The most immediate priority is preparing for “Q-Day”—the moment when quantum computers become powerful enough to break classical encryption. The U.S. government has already begun pushing federal agencies to adopt post-quantum cryptography, and companies are starting to test quantum-resistant encryption.

Conclusion

The Quantum Cold War isn’t coming—it’s already here. The battle lines are being drawn in research labs, trade offices, and intelligence agencies. Quantum computing is no longer just an academic curiosity; it’s a geopolitical disruptor. The question is no longer whether quantum technology will change the balance of power—it’s how we manage the fallout when it does.

Nema Milaninia is a partner with King & Spalding’s Soecial Matters and Government Investigations team, specializing in AI, national security, foreign policy, and technology issues. He previously served as a senior advisor in the Biden-Harris Administration, focusing on cybersecurity and artificial intelligence policy, and was senior counsel at Alphabet Inc., managing high-stakes investigations and litigation.

Michael Galdo is a Counsel with King & Spalding’s Special Matters and Government Investigations team, focusing on complex investigations, especially those with cyber, transnational, or national security implications. Mike recently joined King & Spalding after serving for over 15 years as a federal prosecutor, where he held roles such as the Department of Justice’s Director of COVID-19 Fraud Enforcement in the Office of the Deputy Attorney General, the Assistant United States Attorney in Charge of Cybercrime for the Western District of Texas, and a national security prosecutor.